India on the brink

India’s government is desperately trying to stem the rupee’s slide. Indian companies cope, as best they can.

Funds have been quick to sell out of emerging markets since Ben Bernanke first hinted that the US Federal Reserve would reduce its massive purchases of US Treasury bonds in May.

India, the second most populous country in the world, faces one of the most volatile times in its recent history. A torrent of funds has fled emerging markets since May but India has been particularly vulnerable as it faces significant headwinds, from a gaping 4.8% current account deficit to its elections next year.

The Indian rupee has been hard-hit, depreciating by close to 20% against the dollar. The Indian government has been trying desperately to...